Monday, August 27, 2018

In this era of rapid market and technological change, I know I have to challenge my small business advisory clients to keep innovating and stay ahead of the game. As you can imagine, it is human nature to look for a stable and unchanging business process, after all the pivots and chaos of starting your business. Innovation driven only by crises is not leadership and growth.

For example, I’m even getting worried about Apple not showing the kind of innovative leaps that Steve Jobs was famous for. Per a well-known Apple evangelist, Guy Kawasaki, real innovation is a lot more than “simply making the iPhone smaller or the iPad bigger.” Apple needs a product that jumps to the next curve. Customers and analysts are always looking for innovation indicators.

These indicators are a mindset and actions that every one of us can develop and demonstrate, without any special birthright, genes, or advanced intelligence. I will suggest to you as a business owner and entrepreneur that focus on certain key behaviors will drive innovation without waiting for the next competitive crisis:

Be outspoken in communicating proactive required change. Andy Grove was a master at this, with his well-known motto that only the paranoid survive. His mantra was built on evidence that the number of transistors on a chip doubles every 18 months, changing everything. He didn’t wait for competitors to prove current products obsolete.

Always be looking “around the corner” for paradigm shifts. Other champions of innovation, including Elon Musk with SpaceX and Hyperloop, always seem to be building future opportunities from trends and technology turns. They have the courage to make bold decisions, often contrary to conventional market research and linear thinking.

Tie your business to a higher social purpose for inspiration. I find that entrepreneurs who change ahead of the times usually start with the “big” vision of making the world a better place. If you, like John Mackey with Whole Foods, are driven by a cause, rather than just money, you may be bending the market rather than have it bend you.

Create and maintain a sense of urgency for the future. Too many companies try to force a sense of employee urgency through deadlines and performance goals. The best companies, including Google, create urgency within their team by engaging them in the business, addressing personal needs and flexibility, and building win-win relationships.

Isolate new product teams from decimation by daily crises. Today’s business teams are typically understaffed, so expecting them to create the next generation of innovations will not work. Make sure that new projects are an ongoing part of your business, with control of resources, and responsibility to deliver results, like other business components.

Allocate funds for intrapreneurship and acquisitions. In addition to investing in internal new innovative ideas, every successful company regularly looks outside to buy innovation, and use it to change their business. IBM, for example, regularly buys about a dozen companies a year to supercharge their own innovation efforts.

Create positions for exemplary talent from other disciplines. If your business hires only to fill existing openings, it is falling behind, and ripe for competitive crisis. You need to always be scouring your industry and universities for thought leaders and influencers, and working to attract them to your company with new and creative positions.

Set metrics and rewards specifically for innovation. What would happen in your company if all bonuses were predicated on at least 20 percent of revenue coming from products launched within the last three years? People work on what they get measured on. Metrics can be used to change ingrained behavior, as well as build revenue.

These behaviors which accelerate innovation apply to you as a leader at all levels – from an entrepreneur with a small team, to every business executive in a large corporation, to the chief executive of a multi-national conglomerate. Every one of us must actively be inventing the future, rather than reacting to it. It’s a key part of working on the business, rather than just working in it.